As housing prices skyrocket in New Orleans, are miniature houses the answer for homebuyers?

This house in the Irish Channel is being built on an 880-square-foot lot. It goes on sale next month.

Tiny houses veer between fad and architectural fascination in cities across the world, but in New Orleans ­— where waterways and old plantantion lines make frequent curiosities out of the street grid — they may be finding a natural home.

With undeveloped standard-sized lots increasingly scarce among the most sought-after neighborhoods along the Mississippi River, architects and developers are looking for building opportunities on small parcels that have been overlooked until now. While planners around the country tout the urban-infill trend as a counterweight to suburban sprawl, some New Orleanians worry the smaller structures may congest their neighborhoods.

Architect Jonathan Tate and developer Charles Rutledge say they have identified more than 5,000 irregularly-shaped vacant lots traditionally seen as too tiny to be built upon. In the hopes of transforming some of these parcels into new small-but-affordable housing stock, they are building their first "starter home," a house on an 880-square-foot lot in the 3100 block St. Thomas Street in the Irish Channel.

"The lot on St. Thomas 'wasn't worthy of a house' is what the neighbors said," Tate says.

Irish Channel real estate has skyrocketed in value over the past few years, but Tate and Rutledge say it has 20 to 30 irregularly sized empty lots that measure less than 900 square feet. They think if they could use the land to build smaller houses, they could utilize empty space and also open up an increasingly expensive neighborhood to first-time homebuyers.

"The Irish Channel is particularly interesting because the value is going way up, and it's pushing people out," Rutledge says. "We want to see how to make housing more affordable without cheap architecture."

The solution on St. Thomas Street has been to buy a smaller plot of land and build a smaller house, which will have lower construction costs. The house looms tall and thin on a sliver of land between a Creole cottage and a warehouse.

"If we're working with odd lots, we can be inventive with how we use space and [take advantage of] all parts of the lot," Tate says. "Stylistically, its contemporary, but there's enough familiarity to them."

Real estate agent Tracey Moore, who will put the house on the market in August, has said the team is filling a particular niche in the real estate market that has yet to be addressed.

"Smaller lots are hard to deal with, but because they're small, they're still somewhat affordable," Moore says. "Most of the time, these lots are just sitting there with grass growing or people are putting trash on them."

Moore says for someone trying to break into the housing market in a trendier neighborhood such as the Irish Channel or Bywater, smaller lotsare the only things left. Though the thought of developing irregularly sized lots isn't necessarily new, developers often overlook them because they may not turn as much of a profit, Moore adds. Tate and Rutledge acknowledge this, and say their first house on St. Thomas may need to sell for more to make up for the potential of losing money on the sale of future starter homes in the area.

They bought the 16-by-55-foot lot on St. Thomas for $22,000. By comparison, a regular-sized lot in the area recently sold for $285,000, and that's not including the price of building a house. Houses in the area have sold for up to $400 per square foot. The team hopes to sell starter homes for around $200 per square foot.

"We're trying to provide an alternative option for someone with a price point that doesn't exist in this part of the city," Tate adds.

Affordability is a major reason tiny houses have drawn increasing interest around the country. Gregory Paul Johnson, founder of the Small House Society in Iowa City, Iowa, told The New York Times the notion of very small houses becoming popular would have been absurd in the early 2000s.

"But there are so many powerful forces at work right now, like rising energy costs and the mortgage crisis," Johnson told the newspaper. "I think people want small homes because they cost less to purchase, maintain, heat."

But one person's innovation may be another's imposition. Several neighbors recently turned out to protest another narrow home on a small lot on Chestnut Street.

The developer, Logistics Park LLC of New Orleans, is planning a two-story home for the lot at 4621 Chestnut St. The house would be 12-feet, 10-inches wide, 65 feet long, and 28 feet tall, for a total floor area of approximately 1,500 square feet.

The lot itself measures 21 feet across, nearly half the 40 feet normally required, but the city granted a construction permit in March because "a single-family lot can be developed on by right" under usual circumstances, said Leslie Alley of the City Planning Commission. City officials, however, did not notice that the lot had been commonly owned with the neighboring lot property until just last year, Alley said, which means a variance should have been required.

When neighbors pointed out the prior common ownership of the neighboring lots, a stop-work order was issued and a hearing set before the Board of Zoning Adjustments. Anne Raymond, representing the developer, told the board that the lot width dates back nearly a century.

"The lot area and width are the historical lot area and width from 1908," Raymond said. "It is how it is."

The July 13 hearing also brought a number of neighbors in opposition. Justin Chopin, who lives on the Valence Street side of the block, said the lot is too small to be independently developed, and the developer should have known that when they bought it.

"They had to do so knowing it was never going to be conforming to the zoning regulations," Chopin said. "There's not ample parking. It doesn't fit with the construct of the other houses."

Lorraine Neville, whose husband is musician Art Neville, said the lot was always part of the neighboring home as a side yard.

"I know this to be true; it was never an independent lot," Lorraine Neville said, noting that she had a letter signed by 15 adjacent neighbors opposing the construction.

The board, however, said the developer appeared to have followed the proper process laid out by city officials — the city, however, had applied the law erroneously. Board member Tommy Screen said he sympathized with the neighbors' concerns, but the developer's property rights should not be constrained by whether the neighbors liked the design of the house.

"Developers by their very nature are not evil people," Screen said. "They clearly are in America and can make a living and develop things whether neighbors are opposed to it or not, if they follow the rules. In this case you've got someone who came in, and as the result of an error in the process laid out by the city, work was begun, and now we've got two sets of people in a lurch. Sometimes life's not fair, I guess."

After verifying the permit issued by the city in March, Board of Zoning Adjustments Chairman Todd James concurred with Screen, and the board voted to approve the staff's recommendation to allow construction to proceed on the narrow home.

Meanwhile, the house on St. Thomas is set to go on the market by August. The team also is looking at purchasing small lots in Central City, Bywater and the Faubourg Marigny for their next starter home site. For people looking to build home equity and buy their first house, Tate and Rutledge hope their starter home will provide another option in another neighborhood homebuyers may not otherwise have considered.

"As a neighborhood improves, it gets more economically homogenous, and existing residents are forced to move out," Rutledge said. "But part of what makes these neighborhoods attractive is their proximity to the city center, and why shouldn't more people of economic diversity get to enjoy that?"